Selling to an iBuyer eliminates a lot of the hassle of a conventional home sale, but there’s a price to pay for that convenience.
You’ve probably seen iBuyer advertisements before, but what are they, exactly? If you’re a home seller, should you consider selling to one?
To answer the first question, an iBuyer is basically an institutional company or investor who calculates your home’s value with an automated algorithm based on various data. It’s from that calculation that they determine what offer to make on your home. It’s a great concept, and one that I think will change the real estate industry—they’ve already taken over about 4% of our Metroland market in the last couple of years.
However, while iBuyers like Opendoor aim to eliminate all the typical hassles of a conventional home sale, there’s a bit of fine print to consider before dealing with them.
You see, when they make you a cash offer, they charge a transaction fee. Opendoor’s, for instance, claims to be between 6% and 7%, which is close to the average Realtor’s commission fee. When you actually look it up on their website, though, it says their average service charge is 8%. And if you talk to homeowners who’ve actually dealt with them in the Atlanta area, you find out they charge as high as 12%.
They may have taken over 4% of the market, but they’re
not doing so great when it comes to the actual selling process.
Why is that? Well, most iBuyer companies are based in Arizona, and because of that, they’re having a hard time breaking into the Atlanta market. Arizona is a much easier place to use an algorithm to buy a home because there’s not a lot of rain, the homes are more similar, and there are a lot of subdivisions. Here in Atlanta, that’s not the case.
In other words, they may have taken over 4% of the market, but they’re not doing so great when it comes to the actual selling process. They charge a high service fee because it’s the only way they can turn a profit.
With that in mind, if you’re still interested in selling to an iBuyer, we’d be more than happy to help you navigate through the process and see if you’d truly benefit from doing so. We’ll provide you with our own valuation of your home and estimate how much you could get from selling it to one of our investors or on the open market.
If you have any questions about this topic or you have any other real estate needs, don’t hesitate to reach out to me. My team and I would love to help you.